Menu

Global Oil Industry Case Study Analysis

CASE STUDY

Home >> Harvard >> Global Oil Industry >>

Global Oil Industry Case Study Analysis

Background and Facts

Global Oil Industry a workplace materials retailer for little and moderate sized companies has recently been involved in planning for a merger with its rival Residence Deport, which has actually affected effectiveness levels in departmentswith the elderly supervisor involved in legal complications presented by the government Profession Compensation. With the Advertising Head advancing the information of his departure from the business in one year, Jeannie Lewis, the existing head of operations has been asked to take the role in the near future. With challenges in the form of a possible cultural change and also reduced staff member morale, the organization needs a total reengineering initiative at the advertising division.

Issue Declaration
Porter's 5 Forces Analysis
The prospective cultural change at the advertising and marketing division of Global Oil Industry is increasing uncertainty in the working environment leading to numerous difficulties for the Jeannie Lewis that would certainly be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in impacting tactical decisions considering that Stapes Inc. had to abandon its strategies of combining with Workplace Deport after the Federal Trade Commission's intervention at the same time. Given the fact that the shop has a worldwide existence with branches in UK, USA, Canada and also Germany, political factors in each of these countries might have the ability to affect efficiency or calculated objectives. Federal Trade Commission's antitrust fit against the merging used up valuable time of the organization's senior administration recommending that 'political' factors can have serious implications for a worldwide company.

Economic Factors: Financial factors such as the emergence of local business in the international situation recommend that Global Oil Industry is thriving in an atmosphere where there is possible growth of companies. Along with this, fact that store customers are mostly looking for workplace products for office suggests that the marketplace has a rising pattern of entrepreneurs and home based services.

Social factors: Social fads in the economic situation show that consumers are seeking convenience as well as attractive rates. Marketing research shows how the customer for Global Oil Industry lacks recognition regarding finding services which can use a combination of ease and affordable.

Technological factors: Innovation plays an important role in Global Oil Industry's company strategy specifically as the company is piloting Innovation facilities which would certainly use technology sales and also support in the kind of memory upgrades, peripheral installations. (Recap of PEST in appendix 2).

OB Issues and also Effects.

Numerous underlying Organizational Habits problems can be seen in Global Oil Industry's case as highlighted in this section.

Apprehensions concerning social modification: There is worry concerning a cultural adjustment that would certainly take place as soon as Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Marketing with most of the team member already revealing discontent over this prospective move. This predicted change has actually produced tension in the workplace which has been coupled with the previous stress of preparing the firm for a potential merging with Residence Deport.
Pest Analysis
Stressful Task Environment for Newcomers: There is lack of workers that can match the difficult setting of a fast-paced company. Not just does this cause problem in locating the appropriate people, it places anxiety on brand-new hires as can not withstand the rate and pressure that the organization expects them to birth.

Twin Coverage Lines: Novices find this organizational society difficult and challenging to manage especially as dotted line partnerships are suggested to be weak as a whole and objective setting and also performance assessment is still done by the strong line supervisor. This means that newbies could shed clarity regarding their respective roles and also objectives specifically as populated line coverage does not maintain them in direct communication with the strong line managers.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles although it had been guessed that the last would take Krasnow's setting came as an impact to her spirits. Lewis might have been qualified as well as proper for the job but the truth that Kransnow's separation would make Coles a straight report to Lewis may have been the factor for Coles' resignation from services.

Fear & Task Instability: Concern and instability can be recognized as 2 significant worries that Lewis would be managing particularly as the merger has now be terminated and also 2 senior executives of the advertising department would certainly be leaving. The entire obligation of the division would certainly be falling on Lewis's shoulders that would certainly not just be in charge of brining regarding a cultural adjustment however would also have to show herself in her new duty.

Incompatible Administration Design of Leader: Lewis's monitoring design and also its conflict with the advertising division's function can additionally be viewed as an OB difficulty specifically as she has been made use of to managing issues in the procedures department where personnel are instructed to focus on processes and also obtain them right. The advertising department on the other hand can be viewed as a group of people who are made use of to being nurtured by Krasnow that focused extra on output than processes.

Interdepartmental Arguments: Interdepartmental disputes between 3 departments, marketing, merchandizing and also procedures respectively over the appropriation of the advertising and marketing mix can be identified as one more OB concern. Although the marketing department does not share the exact same vision as the various other 2 departments regarding the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing and procedures departments do not concur over the marketing mix allotment among one another either.

Fragmentation in Advertising Department: Fragmentation between the advertising and marketing departments can be determined as an additional OB issue which can need additional focus. The fact that the marketing and advertising areas in the advertising division are separated is stopping both divisions from getting from each various other's experience and know-how. Combination of advertising and marketing with merchandising as well as procedures would certainly become more difficult if the advertising and marketing division itself is disintegrated which can be another possible OB issue.

Global Oil Industry Analysis

Various concepts have actually been utilized to discuss the circumstances to obtain more quality regarding the scenario handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, most supervisors think that staffs are passive as well as careless, have little aspiration and stand up to change. The circumstance at Global Oil Industry is not completely following Concept X, it can be seen that brand-new hires are locating this environment rather difficult which might eventually lead to a greater inclination of the administration towards Concept X. Also while examining Lewis's administration style, concept X may have been suitable in the operations department to some degree but the Advertising department would require dependence on Theory Y in order to get the creative thinking and creativity from the groups.

Tuckman's Teamwork Concept: As much as Lewis's issue concerning bringing harmony between the advertising and advertising and marketing department is worried, this would initially lead to clash as discussed by Bruce Tuckman in his 'Teamwork Concept'. By combining the marketing and also marketing division's work, there may be the very same preliminary detach which might lead to the second stage of 'storming' where the teams test one an additional.

When people are provided with change, they go into stage one and so there may be feelings like unhappiness, unpredictability, frustration, anger, anxiety, denial and also disorientation.The circumstance at the advertising and marketing division of Global Oil Industry is similar so Lewis can obtain comfy with the concept that it is not extraordinary habits. It is throughout this phase that Lewis will have to give guidance to the division so that they can locate a sense of direction. It can be seen just how Krasnow has actually already made this shift simpler by making Lewis get involved in the division a year prior to his actual separation.
Vrio Analysis
Maslow's Demand pecking order: The OB problem pertaining to instability at the workplace has actually been set off to start with by the adjustment in administration and secondly by the truth that the merging will certainly no more be started. Abraham Maslow in his Theory of 'Demands Pecking order' (appendix 5) has talks about the significance of 'safety requires as being a reduced degree demand of a human for triggering inspiration. As seen in the pyramid cooperated appendix 3, we can see just how 'the demand to really feel safe and untouched' is at the 2nd degree of demands. Before a staff member can be made to create mentally, he needs to have his 'Physiological 'as well as 'Security' requires satisfied. This suggests that unless the employees are made to feel secure regarding their existing work standing in Global Oil Industry they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Global Oil Industry Case Study



Ramification of Analysis.

The OB analysis has looked at various theories to recognize how to handle the existing situation available. The complying with three choices have actually been recommended to help Lewis take care of the business obstacles in the advertising division. Each of these choices has been proposed for reducing the transition needed to bring the marketing department according to the requirements of the marketplace as well as for making the cultural modification that would adhere to when the current leader leaves.

Integration of marketing and advertising functions. Separating Adverting as well as Production functions. Assimilation of Advertising And Marketing with Procedures.

Assessment of Alternatives.

Judith Shapiro that has actually earlier been interviewed by Lewis throughout the earlier merging days has experience in business-to-business advertising and marketing along with agency and also retail marketing experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising to deal with both advertising and marketing and also advertising features.

The advantage of this technique is that it will incorporate both features while lowering the requirement for employing an added resource for advertising and marketing. Lewis would be heading the marketing department and in any kind of case her substitute would be required for the present function that she is executing. The negative aspect of this alternative is that outside hiring may bring about animosity from interior employees who may be considering the placement of EVP after Lewis takes over Krasnow's position.

Dividing Adverting as well as Manufacturing: Provided the affordable pressures as well as top quality job called for from the ad agency, it is suggested that Lewis needs to enable the production device to be a different function from the advertising unit. Given that most ad agency had these 2 features as separate units, it makes more sense to comply with the norm. Along with this, both functions may be able to focus on their core triggers a lot more effectively. The drawback of this technique would certainly be that additional costs would have to be borne for establishing up different manufacturing features. A manufacturing head may have to be employed which can raise overheads for the organization.

Assimilation of Advertising with Workflows: Given that Lewis is already dealing with the marketing and also procedures divisions at the same time; it makes good sense to integrate both features because she has actually been effectively dealing with both ends. The fact that both divisions currently have major distinctions over allocation of resources suggests that this integration might have the ability to cause harmony particularly as Lewis would certainly be heading both ends.However there are numerous drawbacks of this action especially as it would place way too much burden over Lewis's shoulders. The truth that Lewis needs to adapt her administration design for the advertising and marketing division recommends that these 2 divisions would certainly be culturally varied. Lewis may not be able to use one kind of leadership design to both departments which can result in ineffectiveness in either one of the two features.

Suggestion.



An examination of the 3 alternatives suggests that combination of marketing and also operations would not be a feasible relocation due to the huge differences between the two departments despite the fact that presently Lewis is handling both. While separation of the manufacturing function might have been a beneficial move for the advertising and marketing department, the reality that it would imply positioning a 3rd feature under Lewis's wing indicates this should be avoided.

Action Plan.
Recommendation
Lewis will certainly take over the duty of EVP Advertising and marketing after Krasnow leaves.

Marketing and advertising features would certainly be merged.

Judith Shapiro will be employed to take Lewis's place as SVP of marketing and advertising.

Manufacturing feature will certainly stay part of marketing under advertising feature.

Lewis will separate herself from procedures.

A democratic management design with employee empowerment will certainly be utilized in advertising division.

Open door plan and also focus on cross department communication will certainly be focused on removing disharmony.

Contingency plan.

If the integration does not exercise as intended, a backup plan would certainly adhere to which would separate the manufacturing function from the marketing feature to lower the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising and marketing department without an SVP. In that case the production function will definitely be divided by placing it under an SVP production.